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By Our Reporter

The national economy has not yet returned to the right track. It is what the latest report of the Nepal Rastra Bank on Nepal’s macro-economic and financial situation published on Sunday showed.

Although Foreign Direct Investment (FDI) showed a promising increase, with Nepal receiving Rs. 6.50 billion in equity-only FDI during the review period, the internal indicators are not satisfactory.

In the first six months of the previous fiscal year, the FDI wasRs. 4.54 billion. Similarly, net capital transfer rose to Rs. 4.29 billion, compared to Rs. 3.11 billion last year.

The Balance of Payments (BOP) remained in surplus at Rs. 249.26 billion, though lower than the Rs. 273.52 billion surplus recorded in the first half of FY 2023/24.

However, remittance inflow declined in the first six months compared to the corresponding period the previous year.

The growth in Nepal’s remittance inflow moderated to 4.1 per cent, reaching Rs. 763.08 billion in the first half of the Fiscal Year 2024/25 coming down from the 22.2 percent growth observed in the same period last year.

However, in US dollar terms, remittance inflows rose by 1.1 per cent to $5.58 billion, compared to a 19.5 per cent increase in the previous year.

The net secondary income (net transfer) rose to Rs. 832.76 billion, up from Rs. 799.54 billion in the same period last year. This growth is attributed to an increase in foreign employment approvals. A total of 230,439 Nepali workers received first-time approval for foreign employment, while 162,628 workers secured re-entry approvals. Last year, these figures stood at 206,390 and 133,940, respectively.

Likewise, Nepal’s current account surplus stood at Rs. 148.17 billion, a slight decline from Rs. 162.56 billion recorded in the same period last year.

Nepal’s gross foreign exchange reserves increased by 13.5 per cent to Rs. 2,316.84 billion in mid-January 2025, up from Rs. 2,041.10 billion in mid-July 2024. In US dollar terms, reserves reached $16.84 billion, reflecting a 10.3 per cent rise from $15.27 billion in mid-July 2024.

Of the total reserves, those held by the NRB increased by 12.1 per cent to Rs. 2,072.34 billion, while reserves held by banks and financial institutions surged 27 per cent to Rs. 244.50 billion. The share of Indian currency in total reserves stood at 24.3 per cent in mid-January 2025.

According to the NRB the foreign exchange reserves remain sufficient to cover 17.3 months of merchandise imports and 14.4 months of merchandise and services imports. The reserves-to-GDP ratio increased to 40.6 per cent, compared to 35.8 per cent in mid-July 2024.

Nepal’s year-on-year (y-o-y) consumer price inflation rose to 5.41 per cent in mid-January 2025, up from 5.26 per cent a year ago.

Among the provinces, Koshi recorded the highest inflation at 6.73 per cent, followed by Madhes (5.96 per cent) and Bagmati (5.14 per cent). Similarly, the inflation rate in Gandaki stood at 4.37 per cent, Lumbini 4.83 per cent, Karnali 4.60 per cent and Sudurpashchim 5.67 per cent.